How do HSA's Work with Medicare?

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Let’s start with some definitions.

An HSA is a Health Savings Account. If you’re reading this post, you likely know that an HSA allows individuals to contribute pre-tax dollars to cover medical costs in a high-deductible health plan. You must have a high-deductible health plan in order to have an HSA and be compliant with IRS rules. Money contributed to an HSA is not taxed as long as it is used to pay for qualified medical expenses. An HSA can either be managed by an employer or by a bank, credit union, or insurance company.

Medicare Part A is hospital insurance and covers inpatient hospital care, limited home health services, skilled nursing facility care, and hospice care. If you’re already collecting retirement benefits from the Social Security Administration or the Railroad Retirement Board, you are automatically eligible for Medicare Part A at age 65. You may also be eligible before age 65 if you have certain disabilities. The Part A deductible in 2019 is $1364, which does not qualify as a high deductible.

Medicare Part B is medical insurance and covers covers medical services and supplies such as outpatient care, preventive services, ambulance services, and medical equipment. You must enroll in Medicare Part B and pay a small premium. The deductible for Part B in 2019 is $185 and doesn’t qualify as a high deductible.

Can I Contribute to an HSA and Be Enrolled in Medicare Parts A and B?

No. If you are enrolled in Medicare Part A and/or B, you can no longer contribute your pre-tax dollars to your HSA. It is a tax violation to have both an HSA and Medicare at the same time.

What if I Want to Work Past Age 65 and Keep Contributing to my HSA?

If you want to continue working past age 65, there are ways to continue contributing to an HSA by opting out of Medicare Part A and not enrolling in Part B.

How do I opt out of Medicare Part A if I’m automatically enrolled?

If you are eligible and work for a company with at least 20 employees, but have not yet filed an application for either Social Security or Medicare benefits, you don’t need to do anything. You can postpone applying for Social Security and Medicare until you decide to stop working.

If you’re already enrolled in Medicare Part A, you can opt out by completing form CMS-1763 and submitting it to the SSA.

However:

  • If you’re already enrolled in Social Security and want to opt out of Medicare A, you will have to pay back all of your Social Security benefits

  • If you’ve have not applied for Social Security benefits yet but have already signed up for Part A, you can withdraw your application for Part A by contacting the SSA.

  • If you work for a small employer and the company’s group health plan is secondary to Medicare Part B, you will have to agree to pay what Medicare B would normally cover. (This is generally not a good option for most people.)

What Happens Later When I’m Ready to Retire?

It is very important to know that you must stop contributing to your HSA 6 months before you enroll in Medicare A. This is because Social Security’s retirement benefits are retroactive 6 months.

Still Confused? I Can Help

The ramifications of HSA’s and Medicare are complicated. If you have questions or comments, please let me know. I’m an independent Medicare agent and will do my best to help find the best solution for you.

"Photo" by Wonder woman0731 is licensed under CC BY 2.0

What's the Difference Between a Medicare Annual Wellness Visit vs. an Annual Physical?

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There are Two Main Differences:

Medicare will Pay for an Annual Wellness Visit, but not an Annual Physical.

The purpose of an Annual Wellness Visit is to establish your baseline health condition and prevent medical problems before they occur. It is fully covered by Medicare as a cost-saving way to keep you healthy.

When making an appointment, be sure to specify that you want to schedule an Annual Wellness Visit in order to prevent getting a costly bill afterward.

Typical things covered in a Wellness Visit:

  • Check height, weight, BMI, blood pressure, etc.

  • Complete and review a Health Risk Questionnaire that may identify personal risk factors that may affect your physical and mental health

  • Look for signs of cognitive impairment

  • Discuss risks based on your personal and family health history

  • Assessment and update prescriptions taken

  • If recommended by your doctor, Medicare also covers preventive services such as preventive cancer and cardiovascular screenings, cholesterol testing, bone density measurement, flu shots, alcohol abuse counseling, etc.

Once your current baseline health condition has been established, you and your doctor can then develop a person wellness program based on your unique health factors.  

If your Wellness Visit exceeds the services covered because your doctor recommends additional testing or treatment, Medicare beneficiaries will typically owe a copay or other charges.

An Annual Physical is Much More Comprehensive than a Wellness Visit

A typical annual physical includes all the services of an Annual Wellness Visit, plus additional services based on your health condition.

Additional services potentially covered in an Annual Physical:

  • Lung exam

  • Head and neck exam

  • Abdominal exam

  • Neurological exam

  • Reflex exam

  • Blood and Urine lab tests 

As a general rule, an Annual Physical includes more in-depth services where the doctor has to “physically” touch you, test you, or take samples from you.

Both are Important

Even if you are in good health, an Annual Wellness visit is important for maintaining your health because it helps diagnose and address health concerns early. Annual physicals are important as a more in-depth health exam addressing specific needs.

I hope this post helps. Please contact me with any questions.

Photo by medicalmuseum is licensed under CC BY 2.0

Blue Cross Blue Shield + Tennessee - What's the Latest?

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Where We Are Now

As many former policy holders know, BlueCross BlueShield dealt an unwelcome blow to many Tennesseans in 2017 when they stopped offering ObamaCare coverage for residents of Nashville, Memphis, and Knoxville. The Chattanooga-based company is the state’s largest insurer and was initially the only provider to offer coverage across all of Tennessee, so the withdrawal left many policyholders scrambling for coverage.

Good News

The good news is that new proposals indicate that Blue Cross may be poised to reenter the Nashville and Memphis markets in 2020. This news come after they reentered the Knoxville market in 2019. Additionally, Cigna is planning to expand their coverage to include Chattanooga and Jackson and surrounding counties in 2020.

According to Tennessee Department of Commerce and Insurance office, the five major insurance companies in Tennessee have proposed the following (as reported by the Tennessean):

  • BlueCross BlueShield of Tennessee: Proposed coverage adds Memphis and Nashville areas to be available Statewide. Proposed 2020 rate request seeking an average increase of 1.4%.

  • Bright Health: Coverage continues in Knoxville, Memphis and Nashville areas. Proposed 2020 rate request seeking an average increase of 2.93%.

  • Celtic/Ambetter Insurance: Coverage continues in Chattanooga and Memphis areas with proposed coverage expansion into Nashville and Knoxville areas. Proposed 2020 rate request seeks an average decrease of 1.6%.

  • Cigna: Coverage continues in Knoxville, Nashville, Memphis, and Tri-Cities with proposed coverage expansion into Chattanooga and Jackson and surrounding counties. Proposed 2020 rate request seeking a premium decrease of 5.7%.

  • Oscar Health: Coverage continues in Nashville and Memphis. Proposed 2020 request seeking an average decrease of 8.3%.

Blue Cross originally cited heavy financial losses for the reason they dropped coverage for much of Tennessee in 2017, and the withdrawal prompted many to fear a collapse of the Affordable Care Act in the state. However, the new proposals, which show that providers are hoping to either cut premiums or hold increases to a minimum, seems to indicate a stabilization of the market.

The proposals are not final yet, but it does appear that the market in Tennessee is more competitive compared to a few years ago, which should translate to more choices and more attractive premiums.

I’m based in Nashville and an agent for BlueCross BlueShield, Cigna, Bright and Oscar, and am pursuing a contract with AmBetter. I will do my best to answer your questions and keep you informed. Please feel free to contact me with any insurance questions.

"Nashville" photo by phedot is licensed under CC BY-NC-ND 2.0

Medicare Advantage vs Medicare Supplements (Medigap)

I’m a licensed Medicare insurance broker in Nashville and appointed with Aetna, Blue Cross, Cigna, Humana, United Health Care, and many more carriers. I advise people every day Medicare Advantage Plans or MediGap insurance. When I speak with people about their Medicare choices, we spend a lot of time discussing the differences between Medicare Advantage and Medicare Supplements.

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Let’s try to clear up some of the confusion.

Traditional Medicare includes Parts A and B, but it doesn’t cover everything. Part A covers hospital stays and some stays in skilled nursing facilities, but you have a deductible and limits on the coverage. Part B, which is optional and requires a premium*, covers medical expenses such as doctors' visits, lab tests, outpatient procedures, etc.

To get more comprehensive coverage and reduce out-of-pocket spending, many people opt for Medicare Advantage plans or Medicare Supplements.

Medicare Advantage plans are an alternate way to get Original Medicare, while Medicare Supplements (or Medigap) work with your original Medicare coverage. Both are sold by private companies.

Let’s explore further:

Medicare Advantage (also known as Part C)

These plans are offered by private insurance companies and typically offer additional benefits beyond what Part A and Part B offers. You’re still in the Medicare program, but your benefits will be paid through your Medicare Advantage plan instead of through the federally administered program. You must be enrolled in both Medicare Parts A and B to be eligible for a Medicare Advantage plan.

Medicare Advantage plans may have physician networks, such as an HMO or PPO. Because you would be limited to network providers, Medicare Advantage plans often have lower premiums than Medigap plans - as low a $0 premium on some plans in some areas - except for your monthly Part B premiums.

Most Advantage plans also include a Part D Prescription Drug Plan.

Medicare Supplements (Medigap)

With MediGap your monthly premiums will be higher, but your out-of-pocket expenses will be limited and you won’t be restricted to a network of providers. You can choose a healthcare provider who participates in Medicare, and no referrals are necessary. If you enroll in a comprehensive plan like Plan F or Plan G, you will have very little out of pocket and no co-pays.

Medigap plans don’t include prescription drug benefits, so you should consider buying a separate stand-alone Medicare Part D Prescription Drug Plan to cover the costs of your prescription medications. Also, Medicare Supplement insurance plans generally don’t offer extra benefits like routine dental, vision, or hearing coverage beyond what’s already covered by Medicare.

Premiums for MediGap plans averages $100-$200 per month and vary depending on age and health condition.

If you have questions on Medicare Advantage Plans or MediGap insurance, please feel free to call me. I am located in Nashville and serve all of Tennessee. Thanks.

*The standard premium is $135.50/month for Part B in 2019.

Photo by richiedogg1981 is licensed under CC BY-NC-ND 2.0

Medicare & The IRMAA Cliff

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What is IRMAA?

IRMAA stands for Income-Related Monthly Adjustment Amount and is often described as a tax on Medicare. If you’re an individual with income over $85,000/year, or part of a couple with income over $170,000/year, IRMAA will increase your Medicare premiums for Parts B and D.

The good news is that 95% of Medicare recipients will not face this higher cost. Some might say having to pay IRMAA is a good problem, but those who pay the higher fee rarely see it that way.

The amount you pay is based on your MAGI, or modified adjusted gross income from two years ago. The income brackets top out at $500,000+ for individuals and $750,000+ for couples.

With IRMAA, going just $1 into a higher income bracket could result in paying thousands more in Medicare premiums. This is known as the “cliff” and just a few dollars more in income can result in a significantly higher premium. Also, since IRMAA uses joint income for determining premiums, one high-earning spouse can force both spouses into a higher premium bracket.

What to Do

Plan with foresight and know the ramifications of your financial actions. Make sure that you and your financial advisor are aware that large stock trades, the sale of a house or business and other transactions may result in a jolt in your Medicare premium.

If your income drops significantly to due a one-time, life-changing event, you have the right to appeal for a lower premium by filing form SSA-44. Social Security considers any of the following situations to be life-changing events: the death of a spouse; marriage, divorce or annulment; retirement or reduced work hours for one or both spouses; loss of income-producing property due to natural disaster; or loss of a pension. Filing the form is particularly important during your first year of retirement.

One-time cash windfalls such as the sale of a vacation home, a large portfolio distribution or a Roth IRA conversion, do not qualify as a life-changing event and will result in a higher premium two years later.

I’m a licensed Medicare insurance broker in Tennessee and appointed with Aetna, Blue Cross, Cigna, Humana, United Health Care, and many more carriers. If you have questions on IRMAA or any other Medicare issue, please feel free to call me. Thanks.

Photo by Witches Falls Cotages is licensed under CC BY 2.0

Turning 65 and Medicare - What You Need to Know

Turning 65 brings some welcome relief for insurance coverage with the help of Medicare. Medicare is a massive healthcare programs that brings insurance relief for millions of older Americans, but qualifying and enrolling in Medicare brings confusion for many people.

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Here are answers to some of the most common questions:

When can I enroll in Medicare?

You are able to apply 3 months before you turn 65, even if you’re not yet ready to retire. However, if you have health insurance through your employer, you may wish to wait to enroll in Part B. You may be able to enroll sooner if you are disabled and can qualify.

Many people think that if they start claiming their Social Security benefits at age 62, they can enroll in Medicare at the same time, but that’s not the case. You have to wait until age 65.

How do I enroll in Medicare?

Basically, you enroll for Medicare through the Social Security website.

If you are already claiming Social Security benefits at age 65, you will be enrolled in Medicare automatically, so you don’t have to do anything. Your Medicare card will be mailed to you about three months before your 65th birthday.

If you are not claiming Social Security benefits when you turn 65, then you will need to apply for coverage through the Social Security website here. The process only takes about ten minutes, then you just wait for your card to arrive in the mail. If you don’t already have a Social Security account, you will need to create that first.

What Exactly Does Medicare Cover?

There are 4 parts to Medicare:

  • Part A (Hospital Insurance) - covers hospital stays and some stays in skilled nursing facilities. Most Americans pay no premium for Part A. It has a deductible of $1,364 per benefit period. For hospital stays of over 60 days or skilled nursing stays longer than 20 days, coinsurance is required.

  • Part B (Medical Insurance) - covers doctors' visits, lab tests, outpatient procedures, etc. You must pay a small premium for Part B, and you can opt out if you wish. Standard premium is $135.50/month and goes up to $460.50/month depending on income.

  • Part C (Medicare Advantage) - provides additional Medicare coverage through private insurance companies who are approved by CMS.

  • Part D (Prescription Drug Coverage) - provides coverage for prescription drugs. Part D plans are also offered by private insurance companies. Premiums are low - generally about $50/month or less.

I hope this information helps. I will be happy to guide you through the process of answering any of your questions. I have many options available for Part C and Part D coverage, as well as many Medicare supplement choices.

medicare photo by Aaron Fulkerson is licensed under CC BY-SA 2.0 

2019 Brings a New Alliance with Fridrich Pinson & Associates

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In order to offer more solutions and support to my clients, I’m proud to announce my recent alliance with Fridrich Pinson & Associates. FPA has been a leader in covering the insurance needs of Nashville and surrounding areas since its beginnings in 1957 as the Donnelly & Fridrich Agency. As a part of the team, I will serve as the lead contact for all benefit products for the Agency, including individual and group health plans, disability, Medicare, and life insurance, in addition to developing property and casualty business.

I wouldn’t have gotten this far without great customers, so I made the move confident in the knowledge that everyone I’ve helped serve will benefit from this change. I’ve also just recently received my property and casualty license, so I’ll be happy to provide quotes for anyone’s home, auto, and liability needs.