Question: Help!! I am in the Donut Hole!!!! “Alice, do you have any suggestions” asks Robert.
Answer: I would be glad to help any reader, as well as Robert, with these suggestions. I would first like to point out that Pace/Pacenet (State assistance) and LIS, Low Income Subsidy (Federal assistance) should be explored to see if you are eligible. Qualifying for either of these programs gets rid of the Donut Hole.
If you don’t qualify for either one of these programs, the next step is to explore the individual pharmaceutical patient assistance programs. I use the website www.needymeds.org to assist my clients. Qualification for the assistance programs vary greatly. My strategy is to assist my clients to prepare their paperwork one month before they anticipate reaching the Donut Hole threshold. Part D enrollees receive a statement every month outlining their expenses. This Part D statement, and proof of income are required to qualify for patient assistance. Often, with a little due diligence, my clients can obtain their medication directly from the manufacturer for little or no cost for the rest of the year.
Another method to reduce your costs is to obtain your medications from a Canadian Pharmacy. The total purchase price for our medications from Canada is shockingly low.
Remember, the Donut Hole threshold resets every January.
Question: What are my options for health insurance before I turn 65 and go on Medicare?
Answer: So, if you retire early; as early as 62, you will have to wait until age 65 to receive Medicare coverage. Generally, the ACA (affordable care act “Obama care”) is the best coverage route before you become Medicare eligible.
For 2019, after earning an income of $65,840 for a married couple with no kids, and $48,560 for single individuals, you will no longer receive government health care subsidies. The tax credits (subsidies), are what brings the cost of the healthcare coverage down into the affordable range. Let’s review some common examples that we run into frequently.
A husband reaches age 65 and goes on Medicare. The husband’s wife still needs health coverage and she is 62. The couple’s adjusted gross income is $60,000. That income comes under the $65,560 limit and qualifies for a subsidy or tax credit of $829. The wife would have a monthly healthcare insurance premium of $475 for a plan that has a $2000 deductible, and $600 for a plan with a $500 deductible. The full cost of either plan would be +$829. What if the couple makes more than $65,560? The wife would be paying $1300 a month for the $2000 deductible plan and $1452 a month for the $500 deductible plan.
This realization can put a halt on retirement plans, if you feel that you could not afford those monthly premiums.
Another option is Cobra coverage. Cobra coverage typically lasts 18-36 months. The 62-year-old spouse, in the above example, would probably be eligible for 36 months of Cobra coverage when her Medicare eligible husband turns 65 and retires.
Most clients feel that the cost of Cobra coverage is excessive. After working out the different scenarios for earned income and health insurance premiums, Cobra premiums often don’t seem that terrible after all.
Question: Can you deduct the cost of the Medicare Part B & D premiums? I am married and the cost of Medicare and our supplement keeps getting higher and higher.
Answer: Premiums for Medicare and Part D can add up. If you have a high income, or you are married, costs can really add up. Fortunately, the premiums can potentially help your tax situation. The dollar benefit greatly depends on where you can deduct the premiums:
The business deduction produces the maximum benefit.
The self-employed health insurance deduction produces the second-best benefit.
The itemized deduction is the third-best benefit or may be useless.
Long Term care premiums are also tax deductible. It makes a lot of sense to have a Long-Term Care policy, for many reasons, especially if you are a business owner and can deduct all or a portion of your yearly premiums.
Please consult your Tax preparer for more specific information.
Q: What is the “Welcome to Medicare” preventative visit? Why should I get it??
A: This visit is offered during the first year that you are enrolled in Medicare. This is an easy way for you and your Dr. to get a reference point for your health. Many tests will be run to establish a baseline for future care. The “Welcome to Medicare” visit is more comprehensive than a typical visit. This is a good time to talk with your Dr. about the preventative benefits and other services available to you through Medicare.
Q: What happens if you turn 65 while working for an employer with over 20 employees, so you delay Medicare, but the next year when you are 66, the employer only has 19 employees? Do you have to sign up for Medicare then, or are you locked in because the plan had 20 employees at age 65?
A: Is the question concerning late-enrollment penalties or insurance coverage? As long as the client maintains group coverage, even if the employee count drops below 20, there will be no late-enrollment penalties. The bigger question is who pays the bills? I would be concerned that if the employee count drops below 20, Medicare would become the primary payer. And if you’re not enrolled in Medicare, Medicare won’t pay. This leaves the under-20 employer insurance to pay secondary, which it may not do if Medicare doesn’t pay primary. To be safe, you should enroll in Medicare if the employee count drops below 20.
This week’s question is from Alan in Shamokin Dam:
“Alice, can you please tell me what a Medicare Part B drug is?”
Medicare Part B drugs are medications given in a clinic, doctor’s office, or hospital outpatient setting.
Some common examples of Medicare Part B drugs are medications used in a nebulizer, chemotherapy, Insulin that is used in Insulin pumps only, immunosuppressant drugs, certain oral anti-cancer drugs, most intravenous infusions, some bone density infusions such as Prolia, and of course immunizations like the pneumococcal vaccine and the influenza vaccine.
You pay 20% of the Medicare-approved amount for these covered drugs, and the Medicare Part B deductible applies.
A standard Medicare Supplement or Medigap plan will pick up that 20% payment.
A Medicare Advantage plan or Part C requires you to pay that 20% of the cost of the drug. Medicare Advantage plans do have a cap on annual medical expenses, typically in the $3,400 to $6,700 range.
Question: Tax deduction and Long-Term Care Insurance:
My wife and I are considering Long-Term Care Insurance. We understand the importance of having choices, and not being a burden someday to family members. I thought someone told me that I can deduct the premiums for this Insurance on my tax return. Is this true?
Long-Term Care Insurance is one of the most important coverages to consider. Remaining independent, and having excellent care choices like in home care, adult day-care, assisted living, and nursing home care someday will prove invaluable.
Business owners can typically deduct a very large amount, if not all of the premium as a business health deduction. It is a home run, when you can deduct the premium from your total business income, and have great coverage too.
If you don’t own a business, the deduction is less appealing. The deduction will follow the same rules of deducting health expenses. Deductions are only helpful that exceed more than 10% of your adjusted gross income.
Please consult with your tax person for more specific details regarding the deductibility of Long-Term Care Insurance. If you need more details about Long-Term Care Insurance and if it makes sense for you, please give us a call.
Alice, I thought everyone that losses their health insurance like our Wood-Mode community should have the Cobra option available? Someone told me it was not offered, why?
The rules change for Cobra when a health plan is ended. Because the group plan does not continue to be offered, it would be impossible to have ongoing continuing coverage. For this reason, unfortunately Cobra can not be an option.
There are some health care solutions that hopefully will work for you.
The answer for most will be the affordable care act plans through the Healthcare Marketplace. Children may be eligible for CHIP, the state insurance program for children. Employees that are eligible for Medicare should proceed forward to get their Supplemental coverage in place. We have been willingly directing anyone who calls to solve their individual healthcare needs through this very complicated and scary process.
Question: I don’t take any prescription drugs; do I have to sign up for Medicare Part D??
It is terrific that you are healthy and not taking any medications. The short answer to your question is no, you are not required to enroll in Medicare Part D. My answer is not completely accurate and of course you know there is more to this answer. I firmly believe that everyone should enroll in a part D plan when first eligible. Even if you don’t take many prescriptions now, you should consider joining a plan to avoid a penalty. I have helped several people recently get into a Medicare Part D for the first time and their penalty is around $36 a month. This penalty will be added to the 2019 Part D premium. 2019 Part D premiums range from $12-$75 a month. Yes, these clients were healthy back in 2006 when they could have signed up for Medicare Part D. Because their medications are extremely expensive now, yes, it is worth it now for them to take the hit to their wallet. If you don’t take any medications, enroll in the least expensive plan for future insurance protection.
Question: I get so much junk mail!! I am turning 65 in the next year. How do I know what is important Medicare related mail, and what is junk?
We all have fallen short to deceptive advertising. It is no surprise when I tell you the Medicare Market is a huge target of direct mail ad campaigns.
An easier way to answer this question is to focus on what you should be looking for.
Your Medicare Card- (Only if you are already taking Social Security) This is the only way it will magically end up in your mailbox. The envelope will have the Department of Health and Human Services written in the corner.
If you are not taking Social Security and you are not sure what to do: our office helps people navigate the Medicare Maze and the do’s and don’ts.
Extra Help from Social Security for your Prescription Drugs form.
This form is blue and white. On this form you fill out income related questions to see if you qualify for partial to full help with prescription drugs. My advice is for everyone to fill the form out. Give it a shot. I have seen several people end up qualifying for the extra help, and none of us could explain how or why they ended up qualifying.
Other than the above two items, everything else will essentially be some form of advertisement. We always tell all out clients to bring their pile with them. We help them to sort through the items to be kept and the items to be tossed.
IMPORTANT-Medicare does not send out postcards that you should fill out and return for more information. Filling out those cards will guarantee in several weeks you will be getting a call from an Insurance Agent.
Question: I am 75 and I never enrolled in a Medicare Part D plan. I just found out about the PACE/PACENET plans available to seniors age 65 and older. I was told with this program, I should have a Medicare D plan. I don’t want to get a penalty for never enrolling in Medicare Part D. I guess my hands are tied now, and I can’t enroll now in Pace correct???
You are happily wrong. This year the Pace/Pacenet plans have had some big changes. When you enroll in a Pace “partner” Medicare part D plan, penalties for late enrollments will be paid for you by the state. If you never enrolled in a Medicare Part D plan, you can now. The Pace program will continue to pay your late enrollment penalty as long as you qualify for the program. If anyone needs help applying for the Pace/PaceNet programs we can lend you assistance with the process.
Alice, what is the importance of Short-term care insurance? Is it true that it’s really expensive?
Answer: Short term care insurance is very important. As we get older and ailments increase, we all would prefer to receive our care at home. No one wants to think of being in a nursing home or assisted living facility. Did you know that 51% of long-term illnesses last less than 1 year? So why not have insurance that will allow you to get your care in your own home? You won’t have to worry about not having someone at home with you to care of you. The short-term care insurance will give you just that; someone to come into your home and care for you. Your sickness will not burden your working children who have a family and may not be able to take off work to care for you. Short-term care insurance is much more cost effective than you think. Your premium can be as low as $50 per month. While you are healthy is the time to buy short-term care insurance. Don’t wait until you think you’ll need it because then you can’t get it!
Who should consider short term care insurance? It is very important to have especially if you are single. Think about the reality of who is going to care for you if you have a knee replacement and need to come home and you live alone. Or if you have a disabled partner, you may want to look into this as well. How are they going to take care of you when they have their own disability and can’t lift? Short-term care insurance would eliminate all your worries and fears.
Why to consider short-term care insurance:
It is much more cost effective than long-term care insurance and still provides you with excellent coverage.
You want your care at home versus a nursing home or assisted living facility.
You don’t want to worry about who will take care of you or if you can afford to go in a nursing home.
Alice, I thought I had a good part D plan. Recently, I went to the Pharmacy and had to pay over $200 for an inhaler for bronchitis. Alice is it the cost of the medication, or do I need to explore other Part D options this fall?
The answer to that question may be that both issues need to be addressed. I find people do not really understand their Medicare Part D plans until they need to fill an expensive medication. Many Part D plans have a deductible to meet before a Tier 3-5 medication will drop in price. Often people get the false impression that their medication is not covered when in fact they are in the deductible phase of the drug plan. When you don’t take any, or just a few Tier 1 or 2 medications, having a low monthly premium with a deductible makes sense. Just remember that you are saving a lot on monthly premium. You might have to take a hit to your wallet, in the event that you have to take a random Brand name medication.
The alternative is a Medicare Part D that does not have a deductible. Well you guessed it, plans without deductibles for all Tiers are generally more expensive. It is the old law of they get you coming or going. We find that some people hate deductibles and don’t mind the idea of paying more for a “what if” scenario to have that medication covered with a co-pay or co-insurance right away. Other people would rather pay less premium and cover that occasional Tier 3-4 medication out of their pocket. It is a personal preference.
The new Shingles vaccine Shingrx is covered under Medicare part D and is a Tier 3 medication and subject to any deductible. This shot is given twice and costs around $145 each time which would be applied towards your deductible. If you are considering this shot, it may make sense to switch your Medicare Part D plan this fall in the Annual Election Period.
Feel free to contact our office for more in-depth information regarding your own Medicare Part D questions.
Alice please help me, I just got put on Nexavar which they told me costs $18,670 per month. I can’t afford this can you please help!
Bayer pharmaceutical company just hiked the price of two of their cancer drugs by $1k per month and unfortunately Nexavar was one of them. Nexavar is used to combat kidney, liver and thyroid cancers. Bayer’s other medication Strivarga is used to treat colorectal, liver and gastrointestinal cancers and now costs $16,860 per month.
James is on Medicare and has a Part D plan. Fortunately, there is cost containment when you have Medicare Part D. Unfortunately, the out of pocket cost for a year’s worth of medication would be approximately $7000 on the average Medicare Part D plan. This amount of money is a lot for the average family to be able to afford. The recent increase by Bayer was an exceptionally bold move. This was the second price increase for the two cancer drugs in six months.
It was also interesting that this price increase came after President Trump presented his blueprint to lower drug costs.
I am aware of only two options to help pay for the high costs of these types of drugs.
Bayer and other pharmaceutical companies offer numerous programs for patients who cannot afford their medications. Patient assistance is handled through your Dr.’s office.
Cancer Insurance is a great way to help people with the high costs that are associated with cancer. Cancer policies will give you a lump-sum cash benefit paid directly to you. Cancer insurance is extremely affordable. For example, someone age 64 could purchase a policy giving them $10,000 for around $23 a month.
Knowing that cancer costs are rising and the second most common cause of death, our office always recommends a cancer insurance plan.
Stay tuned and engaged for the next column in two weeks which will address President Trump’s 6 key proposals to combat rising drug costs.
For help and further clarification please feel free to call our office.
The Medicare Prescription Pharmacy that I use will no longer be a “Preferred Pharmacy.” What happens now?
This does happen and brings up so many questions about your Medicare Prescription Drug Plans. It does not seem fair to change things related to your drug plan mid-year. To answer your question, yes, the Medicare Prescription drug plan can change the Preferred Pharmacy status mid-year.
A Preferred Pharmacy is one that Buddies up with the Medicare Part D plan to offer the best prices. A small example….
The most popular Humana Part D plan buddies up with Walmart.
Silverscripts buddies up with CVS, Weiss, Lewisburg Pharmacy, and Shade Mountain Pharmacy in Snyder and Union counties.
Envisions buddies up with CVS, Giant, Lewisburg Pharmacy, Weiss, Shade Mountain, and Trutt’s Pharmacy.
You will not be maximizing the benefit available to you through your Medicare Prescription drug plan by using a Standard Pharmacy. To make sure you are getting the best price available for your covered drugs, choose a Preferred Network Pharmacy to fill all your medications.
Transferring your prescriptions is easy. You can contact your preferred pharmacy directly and they will help you.
Don’t forget the change time is fast approaching. You can change your plan October 15th-December 7th. If you require more assistance, please contact our office.
Recently CMS announced that Medicare is about to pass another milestone once it hits 60 million beneficiaries this year. Unfortunately, with more enrollees, comes more problems with Medicare Fraud.
No one from Medicare will be calling you to verify your new Medicare numbers! There have been several reported cases of an individual calling claiming they were from Medicare. These people tried to obtain personal information.
I also want to be very clear, no one from Medicare will be calling you or stopping by at your house, to sign you up for Medicare Supplement plans.
Are you turning 65 in the next year? You will get the most mail you have ever gotten in your whole life. If you fill out any reply card it is likely a solicitation of some kind. Someone will call you. If you put your information into an online site for information, be prepared to receive many calls a day. Many of our clients report that they receive 20+ calls a day. I recommend a face to face meeting with a representative that offers many different companies and can compare them. And again, no one from Medicare will stop at your house to try to sell you insurance.
This week’s Medicare tip involves just a simple question. Did you know that you could pay lower prices for your prescriptions at the pharmacy, by just asking what the available cash price is? Under a little-know Medicare rule, you could pay less, but only if you ask. Please call us if you would like help with your Prescription drug questions. At our agency we are committed to empowering people with the information they need to make informed prescription and health insurance choices.
Alice, after looking over my Social Security Statement at tax time, I noticed that I was getting charged for my Part D drug plan when I had previously qualified for a Low-Income Subsidy and received my coverage for $0 premium. Can you please tell me what I need to do to get the $0 premium coverage back again?
Upon research, we find that once enrolled into a Part D drug plan, many enrollees never review their Part D drug plans and just “go with the flow”.
More than 12 million Part D enrollees (29%) receive low-income subsidies. These additional financial subsidies, also called “Extra Help,” pay Part D premiums for eligible beneficiaries, as long as they enroll in PDPs designated as premium-free “Benchmark” plans.
So, what went wrong for you?
Failing to be educated on your Part D drug plan premium and how you are paying for it.
When reviewing your end of year Social Security statement, don’t just look only at the bottom line deposit. Read each item that is being subtracted from your monthly Social Security deposit.
Every Fall you need to take a look at your Part D drug plan and re-evaluate it. If you are unsure or unable to do this on your own, then you need someone knowledgeable to help you.
Your current Part D drug plan no longer meets the Medicare “Benchmark” status, therefore, you are paying a premium. With some due-diligence you could have a $0 premium plan with the same low co-pays.
Fortunately, you do not have to wait until the fall Annual Election Period to enroll in a “Benchmark” plan. Please give our office a call for education and enrollment assistance.
Alice, I heard that Medicare Supplements C and F are going away. I currently have plan F, what do I need to do?
I would first like to give you a little background on why Medicare Supplement plans C and F are going away. Congress signed and changed the law in 2015 that affected various aspects of health care, including Medicare Supplement plans. The new law starts on January 2020 and only affects newly eligible Medicare beneficiaries. Please continue to read if you currently have plan F.
If you already have plan F, you can keep it. But the truth is you may not want to keep it. Plan F has been the most popular plan for a very long time and has the largest amount of enrollees. Plans C and F cover the annual part B deductible. The Part B deductible is not one of the biggest health-care costs under Medicare. In 2018 the Part B deductible is $183.
New people enrolling into Medicare Supplement coverage should consider buying Medicare Supplement letter G. Letter G covers everything letter F covers, except the $183 Part B deductible. The great news is letter G is significantly less expensive than letter F.
There could be some bad news if you currently have Medicare Supplement Plan F.
It is speculated that plan F premium rates will be increasing at a higher rate than other plans. After 2020 when plan F is no longer enrolling new clients, the population of plan F members will be not adding younger healthy people. Each letter plan is individually rated based on the costs for that particular plan. Without new members enrolling, it is thought that the claims cost will drive up the premiums for plan F.
So what is the takeaway? If you are just enrolling now, avoid letters F and C. If you currently have letters F or C, consider switching to another letter if possible. Your health will come into consideration when switching so don’t wait if you think you want to look into other options.
For help and further clarification please feel free to call our office.