New Medicare Cards Coming by 2019

ATTENTION MEDICARE CARD HOLDERS! GREAT NEWS!

Congress has announced by April 2019 all Medicare recipients will be issued new Medicare cards that will NOT have the recipient’s social security splashed across the front of the card. Your new card will have randomly generated digits and letters to protect seniors from identity theft. About time, right? How long has this been a concern?

new medicare cards issued for better security

The rumor right now is that the new card already has an acronym which will be MBI (Medicare Beneficiary Identifier). No proof or final draft has been produced yet, but the new MBI card will supposedly have 11 characters which will be a combination of upper-case letters, lower-case-letters, and numbers.

For years this has been a big topic of conversation between myself and my clients. We all come to the same conclusion every time, we put men on the moon in the 1960’s but we can’t create a Medicare card to protect our senior citizens?

Because of this government ignorance I always tell my clients to make a copy of their Medicare card, take a black permanent marker and black out the last four digits of the SS number on that copy, then make a copy of that copy and cut it to size, laminate the second copy and carry that card.

When you carry that card and by chance if you should lose it no one has access to your social security numbers. But then again, why should seniors need to go through all that? Why should they have to worry about losing their card?

Now that we are on the subject of our government, let’s not assume this will be a seamless transition. From what we are told, the Trump administration will coordinate with beneficiaries, doctors, hospitals, pharmacies, insurance carriers, state governments etc. to roll this out over a 21-month period.

Can anyone say Obama Care? Anyone remember the mess it created trying to roll the program out on the computer system? How long did it take to be fixed? Is it fixed?

Let me say this now, do NOT automatically destroy your old card once your new one is issued. At least make sure your new health care claims are being paid in proper fashion before discarding your old Medicare card. We have over 57 million Medicare recipients in the United States, accidents are going to happen going through this transition.

No one is going to disagree about this good news on the horizon. We know that the senior market is the biggest target in this country regarding fraud and identity theft. In fact, I was reading there was a 24% increase from 2012 to 2014 during which 2.6 million incidents were recorded.

How many parents and grandparents had to endure the costs of fraud? And to think no one in our government over the last 50 years thought putting social security numbers on Medicare cards would have been a terrible idea. In an age where most of the news is doom, gloom, and fake news, this is a nice change of pace for once…great news for our country’s seniors.

Joseph-Bachmeier

Joe Bachmeier is a co-founder of BGA Insurance Group

(855) 494-0097

info@bgainsurance.net

The article New Medicare Cards Coming by 2019 originally appeared on BGA Insurance Group

Thoughts on the Failed Aetna Humana Merger

aetna and humana merger

Let me start by saying this, if you have a Humana Medicare Advantage plan in the Philadelphia Pennsylvania five county area you need to call BGA Insurance for a review this coming Annual Enrollment Period (October 15th to December 7th).

The following is an excerpt from the USA Today article dated 01/23/2017

“A federal judge Monday temporarily blocked the proposed $37 billion mega-merger between health insurance industry giants Aetna and Humana, ruling that the transaction would reduce competition for consumers.”

The narrative of the USA Today article is based on a whole 17 counties and a much larger market share. I, as a broker, will take a more selfish approach and base my blog on the Philadelphia five county area I write my business in.

Let me say I vehemently disagree that the merger is bad for seniors as explained by District Court Judge John Bates as written in the USA Today piece. I think it’s a great thing as far as my territory is concerned.

I cannot tell you how many people I visit each year who plead with me to help them out of their Humana HMO plan because their doctors or hospital do not participate in the network. Now there are two sides of the coin here. We know Aetna is a major player in the Medicare Advantage market in Philadelphia and Humana is not.

That does not mean Aetna is a better company than Humana or vice versa, as both are fine reputable companies. I can’t personally speak about the counties in Florida and the southern region where Humana has a very strong hold. I can provide numbers and graphs but that is not going to help explain my point of view.

Every Humana policyholder I meet, I ask why they chose the Humana plan. Number one answer given to me is, “I always see their commercials on television” and the next answer I hear is “the salesperson told me my doctor is in the network.”

First, if you live in the five-county area I’m sure you have seen the Humana television commercials marketing MA plans during the Annual Enrollment Period. The problem that seniors are running into when signing up for these plans is that the network lacks enough doctors and specialists who participate to satisfy all policyholders in the area.

The problem is once you decide on an MA plan, you are locked into that plan until the next Annual Enrollment Period. I can’t tell you how many people complain to me that the nearest primary doctor they can visit is 15 to 20 miles away.” Secondly, I do have an ethical issue with some brokers out there not doing their due diligence when sitting down with a Medicare recipient.

Some brokers are showing these plans and not doing the most important thing when selling an MA plan; making sure the Medicare recipient’s doctors participate in the network.

Treat every senior like you would want your parents treated. In a nut-shell it’s hurting seniors year after year by enrolling them into a plan that a lot of doctors and specialists don’t accept. Every BGA Agent is extensively trained to assist your journey into, and through, retirement by utilizing top rated insurance carriers and delivering old-fashioned personalized service.

In this fast-paced computer age we live in, your BGA Agent still makes house calls to ensure you fully understand your rights and entitlements.

With that said, I’m not going to sit here and spew that one company is better than the other company and I’m not talking as the whole market share amongst the carriers. I’m speaking about how this merger affects the Medicare Advantage market in the Pennsylvania area alone, because that’s where I specialize my business.

I am letting you know right away I have no other concerns about this merger and how it affects the market share nationwide, I only care how it affects the senior demographic on my geographical radar.

I’m not sure how this would reduce the competition and cause a monopoly as stated in the article because Independence Blue Cross, HealthPartners, Coventry, and United Health Care are all major players in the Philadelphia five county area. Not only that but MA policyholders also have a choice of choosing traditional Medicare along with a gap policy which further increases the competition and most importantly gives seniors more choices. 

Read more about our healthcare planning service here.

When I visit with seniors who have a MA plan that lacks a strong network, they can breathe a sigh of relief knowing they don’t have to be locked into a plan that does not benefit them. Because I am appointed with most of these carriers I know I can put their mind at ease and offer them a substantial network of doctors, specialists, and hospitals.

Joseph-Bachmeier

Joe Bachmeier is a co-founder of BGA Insurance Group

(855) 494-0097

info@bgainsurance.net

More news related to this article:

The article Thoughts on the Failed Aetna Humana Merger originally appeared on BGA Insurance Group

A Licensed Agent Should Review Your Part D Plan

The Medicare Part D prescription drug coverage is confusing and has you all stressed out. Which one do I choose?

The one with the deductible or the one without?

The one with the lowest monthly premium?

The one that all my friends have?

The one that has a familiar name?

Will all my scripts be covered?

Will I fall into the donut hole? What is the donut hole?

These are just a few concerns on the minds of seniors today when enrolling onto Medicare. Pick the wrong plan and it could cost you hundreds of dollars more a year if not thousands. Let me put your mind at ease. As a free service your BGA Insurance agent will find the most cost effective plan for you, and not only that, we will review your prescription plan every year during the Annual Enrollment Period (AEP) to make sure you are saving the most money as you possibly can.


Senior Couple On Laptop

Reviewing Your Plan

When I sit down with a prospective client and assist them in their Medicare needs, I always mention that not only will I help you find the right Part D plan but as long as you either call or email me (email preferred) in October or November (October preferred) during AEP and update me on your current scripts I will review your plan and discuss with you whether you need to make a change for the new year or let you know that your current plan is still the most cost effective for the new year.

You may ask why would I need to review my current plan and why I may need to change? I say this because every year the Part D plans change, they may change their formulary, copays, deductibles, monthly premiums etc. And as a senior living on a fixed income, I’m almost sure you would like to save the most money as possible.

Sometimes I am asked why I provide this free service, “doesn’t it take up a lot of your time?” Yes and no. During AEP as a broker I am concentrating on bringing new business into my agency but at the same time it is the time of year that seniors can change their prescription coverage regardless of health. No, it doesn’t take a lot of time to review a single plan for someone, but Yes it does take a lot of time to review a lot of plans for all my clients during a two-month window.

But I make it work because I know how important it is for seniors to save money while living on a fixed income. Most seniors are confused about how to go about reviewing their coverage, but for me because I review hundreds of plans a year I can navigate through all of it a lot faster and I know it brings peace of mind to my clients. I also know first-hand because my parents are Medicare recipients and if I didn’t assist my father with his prescription needs it would put them in the poor house.

One thing I will always stress, please don’t take advice from someone who is not licensed to sell Medicare insurance. Just because your friend or spouse has a certain Part D plan that doesn’t mean that plan is going to work for you. Everyone’s prescription needs are different.

Let’s look at how the Part D plan is structured for 2017. There are about 40 plans to choose from which adds to the confusion, all-the-more reason to work with a BGA agent for your Medicare planning.

After your Initial Enrollment Period (IEP-when you originally enroll onto Medicare) you may only change your coverage once a year during Annual Enrollment Period from October 15 to December 7.

If you do not sign up during IEP, a penalty will take effect when you do sign up unless you have proof of creditable coverage (usually employer coverage). That penalty is 1% for every month that you did not sign up for a Part D plan.


Additional Considerations

The first phase is the Initial Deductible phase: Some plans have a $0 deductible but the maximum any plan can charge is $400. If you sign up for a plan with a deductible you pay out of pocket the full cost for your prescriptions until reach your deductible limit whether it be $50, $250 or the maximum of $400.

After your deductible is met or if you don’t have a deductible you go directly to the Initial Coverage Limit phase. This is where you share the cost with Medicare, your shared cost is combined up to $3,700. This cost sharing is known to most folks as copays. Medicare pays 75% and you are responsible for 25% during this period.

The Coverage Gap also known as the donut hole begins once you reach your Medicare Part D plans initial coverage limit of $3700 and ends when you spend a total of $4,950. The Part D enrollee will receive a 60% discount on the total cost of their brand-name drugs purchased while in the donut hole.

The 50% discount paid by the brand-name drug manufacturer will apply to getting out of the donut hole, however the additional 10% paid by your Medicare Part D plan will not count toward your TrOOP (true out of pocket costs).

Let’s look at an example, if you reach the donut hole and purchase a brand-name medication with a retail cost of $100, you will pay $40 for the medication, and receive $90 credit toward meeting your 2017 total out-of-pocket spending limit. Enrollees will pay a maximum of 51% co-pay on generic drugs purchased while in the coverage gap (a 49% discount). For example: If you reach the 2017 Donut Hole, and your generic medication has a retail cost of $100, you will pay $51. The $51 that you spend will count toward your TrOOP.

The Catastrophic Coverage portion of the Part D structure is after you reach the donut hole maximum of your out of pocket costs, during this time Medicare will pay 95% and you pay 5% of the costs for the remainder of the year.

Now I know reading this may still look very confusing but don’t be too hard on yourself because I have a lot of clients who are lawyers and they read long drawn out documents for a living and they also request my help with this. Once I sit down with you and show you the chart and explain it verbally you will have a better understanding how it will work for you.

Every BGA Agent is extensively trained to assist your journey into, and through, retirement by utilizing top rated insurance carriers and delivering old-fashioned personalized service. Read more about Medicare Part D Costs.

BGA Insurance can assist seniors in the following areas:

  • Pennsylvania (Philadelphia)
  • New Jersey
  • Delaware
  • Florida

The article A Licensed Agent Should Review Your Part D Plan originally appeared on BGA Insurance Group

Life Insurance – Tips for 2017

The Complete Guide

There are various life insurance products that are designed for many different situations to help folks take care of their beneficiaries. There are a few that are more popular than others but when purchasing a life insurance product most people have the following reasons:

Final Costs

Paying final costs is the most popular reason most people purchase life insurance. Benefits can be used to pay final expenses, including funeral or cremation costs, medical bills not covered by health insurance, estate administration fees or other unpaid obligations. Even expenses such as a mortgage. For example: let’s say the primary bread winner of the family passes away, the benefits of the plan can assure the home in which the surviving family resides, has the ability to pay the balance of the mortgage.

Debt, Taxes

Paying off debt or replacing income. Life insurance benefits can help replace your income if you pass away. Your beneficiaries can use the money to help cover essential expenses, such as paying off a mortgage as discussed, a vehicle loan or lease, home equity loan, credit cards or securing college educations for children.

Another popular reason to purchase life insurance is an inheritance for your loved ones. The death benefit can also serve as a supplement to other inheritance funds you may wish to leave your heirs.

Some folks use it for paying federal or state estate taxes. Your heirs may face an estate tax upon receiving their inheritance, depending upon the state of residence and the amount. Life insurance benefits can be used to partially or completely offset this cost for your heirs.

Charities

A lot of people have favorite charities and would like to name that charity the beneficiary. This can help ensure your philanthropic goals are met after you die, and that benefits are provided to your charity of choice — even if you don’t have a very large nest egg or estate.


Popular Plans

With that said, let’s look at the most popular life insurance plans and examine what each one offers.senior citizens learning about insurance

Final Expense Insurance policies are designed to offset potential medical bills, small debts and most importantly the cost of a funeral, burial or cremation. These types of policies have a much smaller face value ranging anywhere from as low as $2,000, going as high as typically $30,000 depending on the insurer.

A big convenience to final expense planning is the low affordable premiums associated with these plans. Unlike a pre-paid funeral plan or draining your bank account, you aren’t required to make an initial large investment; instead you can pay a much lower monthly premium.

This type of plan is very popular with the senior market. There are some seniors we meet with that did not plan properly regarding their own passing. These folks do not want to burden their loved one’s or subtract funds from their estate so they purchase a final expense plan to cover that part of their retirement planning.

Most final expense plans have a level benefit plan and a graded benefit plan.

A level benefit plan is usually for the insured’s who are considered healthy without diseases or major chronic conditions. If you are approved for the level benefit plan you will pay a lower cost premium than someone who only qualifies for a graded benefit plan. With final expense plans you pay the premium for as long as you remain alive.

In most cases if you reach 100 years old you stop paying your premium. The other benefit with a final expense plan is that it does build cash value that you can borrow. If you borrow any cash value from the plan it will reduce your death benefit unless you pay it back. The cash value in a final expense plan does not build significant cash value as a universal life plan can.

A graded benefit plan is usually sold when someone answers yes to the qualifying health questions on a final expense plan. In this case the proposed insured can still qualify for the death benefit they are seeking but pay a higher premium than someone who qualifies for the level benefit plan.

The good news is that you can still purchase life insurance. Some examples of qualifying questions are major diseases such as heart disease, insulin dependent diabetes, stroke in the last two years, cancer, Parkinson’s, kidney disease, muscular dystrophy etc.


Questions? No Problem!

Give us a Ring – (855) 494-0097


Term Life Insurance

Term Life Insurance is another avenue people look at when in the market to purchase life insurance. Term life is very inexpensive and that’s why a lot of people are drawn to it. It is the most affordable life insurance purchased but it’s not for everybody. Just like purchasing a home or a car you still need to weigh your options when looking at life insurance especially when it comes to term life.

I always like to say term life is great for young couples who are just starting out in life building a family. For example, let’s say that young couple purchases a home and is starting a family and can’t afford a universal life plan premium with a $300,000 death benefit to cover the mortgage in case either husband or wife passes away. You can purchase a term life plan for a fraction of the cost than a universal plan would cost for that same $300,000 death benefit.

The drawback to term life as compared to final expense or universal life is that there are terms as to where it would pay out the death benefit. Term life plans have periods of terms attached and depending which term you purchase the plan will not pay out a death benefit once that term is up. For example, if you purchase a 10-year term policy and you die in that 10-year period your beneficiary will be paid the death benefit agreed upon.

The same goes for a 20-year or 30-year term period. Most people when they purchase a 30 mortgage will also a purchase a 30-year term plan so in the event of a death the remaining loved one’s have peace of mind knowing they don’t have to leave their home and that mortgage is satisfied.

Another reason someone may buy a term plan is because it is very inexpensive and affordable knowing that if they pass during that term their loved ones are provided for.

With term life if you are still alive after the term period expires you can choose to walk away from the plan and not pay any further premiums. In most cases insurance companies provide you with the option to renew the policy after the term expires but at a much significant higher cost.

Term life insurance plans build no cash value at all.


Universal Life Insurance

Universal Life Insurance in most cases have taken over for what most people know as whole life plans. Most universal life elder couple learns about medigap coverageplans are designed for all the reasons we just discussed with regarding to final expense and term plans but build significantly more cash value over the life of the plan.

As we discussed earlier people purchase universal life plans for final expenses, leaving a legacy to loved ones, estate taxes, charitable contributions, college funds etc. However, one of the biggest reasons people, as I did myself and for my family, purchase universal life, is for tax free retirement planning.

Universal life insurance offers a lifetime of protection, and is similar to whole life insurance, but there are major differences. Unlike whole life insurance, universal life allows you to pay flexible premiums, meaning the insured can modify the amount and scheduling of premium payments. In addition, a side fund known as your cash value account is set up with your policy and the excess premiums, beyond the cost of the insurance, are placed here and earn a conservative rate of interest.

Now let’s look at why universal life can also be used as a tax-free retirement plan. Over the course of a significant number of years you can over-fund your universal life plan and it should be building up a significant amount of cash value depending on the interest rates over the course of the planned years.

The benefit a cash value accumulation account is that as it grows, the cost of insurance can be pulled from there, meaning you don’t have to pay premiums if sufficient funds are available. Once you reach a retirement age where you want to draw a tax-free income you can then borrow against the policy over the course of a 10, 20, or 30-year period depending on how much cash value you built.

I personally purchased this plan for myself for this exact reason, and purchased it for my wife and daughter as well. We all know that our IRA’s, profit sharing plans, mutual funds etc. are not tax exempt, why not have a plan in place for your retirement that is tax exempt? As in the case of my daughter I’m often asked why I purchased this type of plan for her being she was only 9 years old at the time.

I was able to buy her a $200,000 death benefit at only $100 a month in premium. It was very affordable for a 9-year old but not only that, when she graduates college she will assume the $100 a month premium herself and will have a nice tax free retirement plan that should build a nice nest egg of cash value by the time she retires.

Now in my case if I pass away before I retire my wife and daughter will receive a very large death benefit to take care of their needs, otherwise I will have a significant cash amount I can use for tax-free retirement.

Ask your BGA agent to put an illustration on paper for you so you can see the benefits of this plan that I just outlined.
Also, you can purchase a universal life plan for a much lower premium. In this case, you can pay a flexible premium that you can afford that will keep the death benefit guaranteed until the day you pass-away, however you will not build cash value in the plan. This plan is called Guaranteed Universal Life.

When it comes to universal life there are quite a few different products to choose from depending on your goals, so before making a decision, be sure to sit down with your BGA agent and outline what is best for your retirement needs.
Knowing about Final Expense, term life and universal life options can help address all of these concerns.

If you’ve had a policy for years that you’re still paying on, it may have built a significant amount of cash value that you didn’t even realize. Maybe you’re over insured with a large whole life or universal life policy you bought early in life and no longer need to worry about the mortgage payments, your children’s tuition, your loss of income, etc.

All the reason to sit down and review this information with a BGA Insurance agent. There are many instances we’re able to reduce life insurance premiums and keep the same death benefit amount you originally purchased.
Contact us if you are in or near any of the following areas:

  • Philadelphia, PA
  • Allentown, PA
  • New Jersey
  • Delaware

The article Life Insurance – Tips for 2017 originally appeared on BGA Insurance Group

Long-Term Insurance – Tips for 2017

A Complete Walkthrough

Long-Term care is a phrase in the insurance world that most folks are afraid to talk about. But not BGA Insurance Group, in fact we recommend that you do and we’ll even start the conversation for you.

The frustrating part of our business being a broker is that most people view us as “my Medicare person” but contrary to that, we assist in complete retirement planning, and for ALL age groups.

After I help a potential customer understand what Medicare is and how it works I like to ask a few fact-finding questions pertaining to post hospital care. My first question is, “do you have Long-Term or Short-Term Care insurance in place?”

If yes, I ask “when is the last time your policy was reviewed?” 99% of the time it has never been reviewed. I then explain to them that is exactly what I specialize in and that will usually open a brand-new window of conversation to see if they were properly set up from the beginning.Senior African American couple at home

Now most times when I sit down with folks I find they do not have a plan in place to protect their assets at all, which always leads me to asking my next question. “Do you know anyone who has ever needed post hospital care?” More times than not they usually know someone who has needed it.

I then ask “how was their experience? How did it make that person feel? How did it make you feel? How long was their stay, or how long did they need the care? How did they pay for the care? How did that affect their family? How did it affect your family?”

In a lot of cases people lost all their assets having to pay for the care.

All these questions I ask will enable me to open-up a healthy dialogue regarding post hospital care and how important it is to have it. When I finally get someone comfortable to talk about it most concerns people have are remaining independent in the home without intervention from others, but you need help cooking, cleaning, and dressing, and you do not want to move in with a family member.

Who would help and how would you pay for their help?


Potential Costs

Full-time long-term care assistance can run $6,000 – $10,000 a month, or even more if medical care is needed. Most parents do not want their children to bathe them or assist them with toileting. They also want to maintain good health and receive adequate health care.

The biggest concern of all is having enough money for everyday needs and not outliving their assets and income

Let’s start with a Long-Term Care Policy because I think everyone by now has heard the term used when discussing health care. It is post hospital care designed to cover you for a longer period of time than most other plans.

The lifetime probability of becoming disabled in at least two activities of daily living or of being cognitively impaired is 68% for people age 65 and older. That is a scary statistic if you really think about it.

There are three levels of post hospital care that I explain when going over what Medicare covers and what it doesn’t cover. There is Custodial care, Intermediate care, and Skilled care. Most folks are shocked when I explain that Medicare does not cover Custodial or Intermediate care.

In fact, Medicare only covers a small window of Skilled care and you need to qualify for it. Most patients if they need care after a hospital stay only qualify for Custodial or Intermediate care and not Skilled care. All the reason more to talk about a post hospital care policy.


Feeling Overwhelmed? No Problem!

Give us a Ring – (855) 494-0097


You can talk to your BGA agent about all the ways to set up your long-term care plan and there are a variety of ways to make it affordable. First thing to go over is how long the policy will cover you.

In most cases I see plans that have a Benefit Period of two to five years. Another important benefit is the Daily Benefit you would receive. The Daily Benefit is the amount of money you are to receive to help pay for the level of care you are receiving.

You can choose $50 a day, $100 a day, $150 a day etc. But the most important aspect you need to do is add an Inflation Rider onto your Daily Benefit because the level of care you pay for today will be much more expensive 10, 15, 20 years from now if you need the care.

Simply put, you will want your Daily Benefit to keep up with the cost of inflation. Another benefit you will want to discuss is Elimination Days. These are the amount of days until your policy starts paying benefits. Some policies have 15, some 60 and some even 90 days before benefits kick in.


Remaining Independent at Home

It all depends on how much money you have and can afford to pay for care on your own. Let’s go back to a concern that most folks have, remaining independent in the home.a doctor's office visit

It used to be that most Long-Term Care policies would be sold for the sole purpose of the patient being treated in a skilled nursing facility. This leads me to the next benefit that I feel is the most important, home health care.

I like to structure the plan for facility care and/or home health care because most people would rather get their care at home surrounded by their loved ones, they are more comfortable, and they usually recover quicker.

There many other benefits you can add to your client’s policy but the more you add the more expensive it becomes so it is very important to get your client’s input as to what is most important to them.

Long-term care insurance has features that you can adjust. Like buying a car, you can get all the extras, and pay for them, or you can buy a base model that costs less but still provides decent transportation.


Final Thoughts

With all that said it is very important to have a long-term plan in place, but not everyone can afford a Long-Term Care Policy. This is a reason we then discuss a Short-Term Care Policy. It is a policy that in a lot of ways is the same as Long-Term Care but pays benefits for a shorter period-of-time and is much less expensive.

Most policies that are sold are either sold with a 90 day, six month or a year Benefit Period of care but have multiple benefit periods. With Short Term Care the underwriting health questions are usually less stringent than Long-Term Care so chances are more people will qualify.

Other benefits that a Short-Term Care plan may include is Nursing Facility Confinement, Assisted Living Facility, Home Health Care, Adult Day Care, and Hospice Care.

There are a couple of other ways you can even break down a post hospital care plan to fit your budget. Some insurance carriers also sell Nursing Home Care or Home Health Care plans.

This means you have one choice as to where you receive your care but these types of plans are even less expensive than a Short-Term Care policy.

I feel there is no right way or wrong way when purchasing post hospital insurance, just long as you’re satisfied with the benefits you can afford. I know this is a topic you don’t want to discuss with your children although I think you should, but at least discuss it with your BGA Insurance agent, it’s why we’re here.

Contact us if you are in or near any of the following areas:

  • Philadelphia, PA
  • Allentown, PA
  • New Jersey
  • Delaware

The article Long-Term Insurance – Tips for 2017 originally appeared on BGA Insurance Group

Medigap Vs Medicare Advantage in 2017

The Complete Guide

Welcome to 2017! It’s a new year and there will thousands more eligible for Medicare and a thousand more questions when it comes to choosing Medicare health coverage. A lot of seniors we meet with really are confused about what Medigap and Advantage plans cover and how they differ in benefits and what is covered or not covered in each plan.

Seniors choosing a Medicare Advantage plan must realize they are giving up Medicare as their primary insurance.

 

The Advantage plan takes over for Medicare and makes all the rules regarding your health care and sets forth cost sharing, such as copays for doctor and specialist visits, impatient hospital care which can usually cost a couple of hundred dollars each day you are hospitalized, X-rays, lab services, outpatient procedures, ER visits, radiology etc.

When choosing an Advantage plan you would obviously want to sit down with a BGA Insurance agent because there are an abundance of plans to choose from and they vary widely regarding monthly premiums, deductibles, cost sharing and network providers. When I say network providers, you want to make sure whatever Advantage plan you settle on, all your doctors accept the plan you choose.

Each Annual Enrollment Period from October 15th to December 7th these plans change as far as costs so you want to make sure you contact your BGA agent to make sure you are prepared for the upcoming new year.

Let’s outline what is covered in these plans and how they can change from year to year.

Each company that sells Advantage plans have a few plan selections to choose from varying in pricing and covered providers.

For example:
Usually you pay a monthly premium to keep the plan you choose in force throughout the year. Sometimes when a new plan hits the market they have no monthly premium for a year or two. In a few cases as we have seen this year some plans may have a deductible.

That means you reach a certain limit out of pocket before the plan even starts paying benefits.

older couple considering a medigap plan

For example, if you purchase a plan that has a $1000 yearly deductible that would be the amount you would have to pay out of pocket before the plan starts paying benefits. Sometimes routine doctor or specialist visits are exempt from that deductible.

The other thing that is usually standard on Advantage plans are an Out of Pocket Maximums. That is the sum of money you could pay out of pocket for cost sharing. Usually on HMO plans that number is $6700 yearly and if you reach that number the rest of the year the plan would pay 100% of the remaining cost share for that year until your anniversary date.

Most HMOs require referrals for specialist visits. That means you would need a referral from your primary care physician before you can see a specialist for a specific condition. If you purchase a PPO Advantage plan they do not require referrals needed to see a specialist.

 

Another condition that you and your doctor need to take into consideration concerning Advantage plans is that if your doctor suggests you need an MRI or any other specialized test to further treatment, your doctor needs to get it approved with your Advantage plan so the benefit is paid for.

The one problem I find with Advantage plans is that they only cover 80% of the cost for cancer treatments such as chemotherapy and radiation therapy, the other 20% is the responsibility of the insured.

If you purchase an Advantage plan, contact your BGA agent regarding a cancer, heart attack and stroke supplement plan to pay for that 20% gap.

 

Call (855) 494-0097 for help with your plan if you live in New Jersey, PA, or Delaware.

The plans are great and very affordable.

The usual cost sharing benefits that may require a copay are doctor visits, specialist visits, emergency room visits, routine chiropractic services and outpatient surgery. Although hospital inpatient care is a copay most plans charge you the specific copay each day up to a certain amount of days. For example if you are hospitalized as an inpatient you could be charged a copay days 1-6 which could be a couple of hundred a day, but the copays do vary from company to company and plan to plan.

Some Advantage plans offer different kinds of preventative dental, vision, and hearing care for a small monthly added cost.

There is cost sharing involved with regards to cleanings, x-rays, eye exams, eyewear and hearing aids etc.

Another nice benefit you may offered with purchasing an Advantage plan is a fitness program for example Silver Sneakers. If you join a participating health club and use it for a certain amount of days throughout the year, the plan will pay your membership. This is another example of Advantage plans being about preventative care.

Most Advantage plans have drug plans built into the plan, meaning you don’t need to purchase any additional prescription coverage.

 

Of course, they have tiers and you pay a certain copay for a prescription depending on which tier that script falls in.

The model for it usually looks like this:

Deductible/no deductible

Preferred retail cost sharing (preferred generic/generic/preferred brand/non-preferred brand/coinsurance specialty drug)

Standard retail cost sharing (preferred generic/generic/preferred brand/non-preferred brand/coinsurance specialty drug)

Initial coverage limit – A maximum of $3700 in total drug cost.

Coverage gap – The coverage gap begins after you and your drug plan have spent a certain amount for covered drugs. In 2017, once you and your plan have spent $3,700 on covered drugs, you’re in the coverage gap. This amount may change each year.

Also, people with Medicare who get Extra Help paying Part D costs won’t enter the coverage gap.

Catastrophic – Once you’ve spent $4,950 out-of-pocket in 2017, you’re out of the coverage gap. Once you get out of the coverage gap (Medicare prescription drug coverage), you automatically get “catastrophic coverage.” It assures you only pay a small coinsurance amount or copayment for covered drugs for the rest of the year.

Most Advantage plans will offer a mail order benefit so you can purchase a 90 day supply.

Other benefits that usually require cost sharing that you should know about are:

Urgent care – Ambulance – Rehabilitation services – Mental health – Podiatry – Skilled nursing facility – Durable medical equipment – Prosthetic devices – Wellness programs – Part B specialty drugs – Radiology services – Cat scans – MRI’s – Surgery


Medigap Plans

Also known as Medicare supplement plans is where Medicare A & Medicare B is your primary health insurance and you then purchase a Medigap plan to cover the gap Medicare doesn’t pay for. Basically your A & B covers about 80% of hospitalizations, ER visits, doctors and everything else “medically necessary”.

For example, if you suffer a stroke and you’re hospitalized for 10 days, your Medicare A&B will cover about 80% of the cost and depending on which Medigap plan you purchase it should cover all or mostly all the 20% gap.

Something else to think about when purchasing your Medicare insurance. Unlike Advantage plans where your doctor has to get approval to treat you for certain tests outlined earlier, under Medicare if your doctor says you need the treatment, it’s usually covered as long as your doctor codes your treatment correctly when submitting billing to Medicare.

Medicare usually abides by what your doctor says you need, which means you are in control of your own health care. In short what it usually comes down to regarding Medicare and your Medigap plan is if your medical doctor feels you need it, it is usually covered.

If you purchase a Medigap plan you have an open network throughout the United States, meaning if the doctor, specialist, or hospital accepts Medicare your Medigap plan is automatically accepted.

Medicare or your Medigap plan do not require referrals when needing to see a specialist. If you have an issue that you can only see a specialist for you just book the appointment and go, you do not need special permission or approval from your primary doctor or Medicare.

Benefits covered under Medicare and Medigap plans for example are:

Doctor visits – Specialist visits – Inpatient hospital care – ER visits – Outpatient procedures – Urgent care – Ambulance – Rehabilitation services – Mental health – Podiatry – Skilled nursing facility – Durable medical equipment – Part B specialty drugs – Radiology services – Cat scans – MRI’s – Cataracts – Glaucoma – Surgery – Blood – Hospice care

Earlier I talked about cancer treatments such as chemotherapy and radiation therapy and that Advantage plans only cover 80%. With Medicare as your primary, chemo and radiation therapy is covered and your supplement plan will pick up the other 20%.

Medicare or your Medigap plan does not have built in drug coverage like an Advantage plan has. If you decide on Medicare as your primary insurance you need to purchase a stand-alone prescription plan at an additional monthly premium.

A lot of folks we meet with are confused when trying to figure out which Part D plan is right for them so we take away that burden. As their BGA broker we will sift through all the various drug plans and find the one that will save them the most money each year.

Not only will we do it the first time but every year after that. It’s a free service BGA agents provide their clients because we really do enjoy when we can save them money each year.

The model for the Part D program is the same as I outlined earlier when talking about Advantage plans. In this case, you have a choice which plan to choose from which best fits your needs.

Monthly premium
Deductible/no deductible

Preferred retail cost sharing (preferred generic/generic/preferred brand/non-preferred brand/coinsurance specialty drug)
Standard retail cost sharing (preferred generic/generic/preferred brand/non-preferred brand/coinsurance specialty drug)

Initial coverage limit – A maximum of $3700 in total drug cost.

Coverage gap – The coverage gap begins after you and your drug plan have spent a certain amount for covered drugs. In 2017, once you and your plan have spent $3,700 on covered drugs, you’re in the coverage gap. This amount may change each year.

Also, people with Medicare who get Extra Help paying Part D costs won’t enter the coverage gap.

Catastrophic – Once you’ve spent $4,950 out-of-pocket in 2017, you’re out of the coverage gap. Once you get out of the coverage gap (Medicare prescription drug coverage), you automatically get “catastrophic coverage.” It assures you only pay a small coinsurance amount or copayment for covered drugs for the rest of the year.

Medicare or your Medigap plan does not cover routine dental or routine eye exams. However if you have a medical condition such as cataracts or glaucoma it is covered under Medicare and your Medigap plan. BGA Insurance does offer additional coverage for dental, vision and hearing that is inexpensive and would be separate from your Medicare.

Joseph-Bachmeier

Do you have questions about Medicare Advantage or Medigap in 2017?

Contact us! Philadelphia, New Jersey, and Delaware agents can help.

Joe Bachmeier

(855) 494-0097

info@bgainsurance.net

 

The article Medigap Vs Medicare Advantage in 2017 originally appeared on BGA Insurance Group

What Is Final Expense Insurance?

American journalist Frank McKinney said over a hundred years ago, “Fun is like Life Insurance, the older you get the more it costs.” While a funny limerick at the time, insurance companies have adapted from this concept.

What is one to do if they have gone their whole life without purchasing any type of life insurance and have loved ones they need to protect? Years ago there were not many options for seniors who found themselves in this situation, Life Insurance late in life was typically very costly and thus not an option for seniors. This is why many insurance companies today now offer Final Expense or Burial Insurance.

seniors thinking about final expense

What is Final Expense Insurance?

Traditional life insurance, whether it be term life, whole life or universal life policies have been around forever and are designed to offset the earning power and life value of its policyholder.  They are in place to cover loss of income, mortgage costs, college tuitions, etc. and can have death benefits in excess of a $1,000,000.

Unlike traditional life insurance, Final Expense policies are designed to offset potential medical bills, small debts and most importantly the cost of a funeral, burial or cremation. These types of policies have a much smaller face value ranging anywhere from as low as $2,000, going as high as typically $30,000 depending on the insurer.

Prior to the popularization of Final Expense products being offered by insurance companies, a lot of folks went directly to a funeral home and purchased what is called a Pre-paid funeral plan. These types of plans are typically paid in full upfront and the funeral home becomes the beneficiary of that plan to use for the cost of your service.

There are some pitfalls to this option. As was already mentioned, the beneficiary of your policy is the funeral home. What happens to that money if it is mishandled or misappropriated, if the funeral home goes out of business or if you, the policyholder, were to move?

Also, most of these plans only cover the agreed upon price at the time of purchase and may not account for inflation. So a desired funeral service may have one cost at the time of purchase and may cost something considerably different years down the road when it is time to put that plan in motion. 

Lastly, when buying a pre-paid funeral plan, the death benefit of that plan can only go towards the cost of the funeral services.  There is nothing to be passed on to family members to offset other costs associated with your passing.

This is where insurance companies saw a gap in what was available to seniors and began offering Final Expense policies. Final Expense insurance differs drastically from how pre-paid funeral plans work at almost every turn. First, insurance companies are monitored and regulated by the state. If a company were to go bankrupt, it is up to the state to step in and use it’s guarantee fund to protect policyholders so your policy is always protected.

Next, with a Final Expense policy, you as the policyholder get to dictate who your beneficiary is. You can name one person as the beneficiary of your policy or you can spread the death benefit out to many members of your family. You can even name contingent beneficiaries just in case something were to happen to your primary beneficiaries and you are able to change these distinctions at any time as life changes occur.

Unlike a Pre-paid funeral plan, Final Expense policies can cover costs beyond that of a funeral or cremation service.  Maybe you have a small credit card debt, existing medical bills or even would like to leave your family some financial assistance. These are all options you have as the owner of a Final Expense policy.

Another convenience to Final Expense is the surprisingly low premiums associated with these plans. Never has life insurance been more affordable and this applies to Final Expense policies as well. Unlike a pre-paid funeral plan, you aren’t required to make an initial large investment; instead you can pay a much lower monthly premium.

Now that you are comfortable with the differences between traditional life insurance, final expense insurance and pre-paid funeral plans the big question now is; “Do I need it?”

Insurance needs are different for everyone. The level of coverage one needs differs from family to family and person to person. Today a bare bones funeral, depending on where you live, typically runs about $6,000 but that can easily get upwards of $10,000 after you factor in flowers, a catered memorial, obituary notice and additional services. Unfortunately, Social Security is not properly funded to offset these costs and will typically only pay around $300 at the time of your death.

insurance broker meeting with elderly couple

There are 3 types of responses I hear when discussing Final Expense policies with my clients:

“I’ve had a life insurance policy for years and I don’t need anymore.”

“I have money set aside for those costs.”

“I want a minimal affair, my kids can bury me in the backyard.”

Knowing about Final Expense options can help address all three of these concerns. If you’ve had a policy for years that you’re still paying on, it may have built in cash value that you didn’t even realize. Maybe you’re over insured with a large whole life or universal life policy you bought early in life and no longer need to worry about the mortgage payments, your children’s tuition, your loss of income, etc.

If you’re in this situation, you can roll the cash value of your existing policy into a single premium Final Expense policy with it not even affecting your monthly expenses. And unlike a pre-paid funeral plan where a $10,000 initial investment will yield $10,000 worth of services, insurance companies will significantly pad your death benefit if you elect to purchase a single premium plan. For example, if a 65 year old male in Pennsylvania were to buy a $10,000 single premium Final Expense policy, the death benefit for that plan would be over $16,000!

“I have money set aside for my funeral services.” It’s great that you’re in a position to have adequately saved and planned for this event, however the money you put aside for your funeral may not go immediately to your heirs. It will have to pass through probate along with the rest of your estate, and while that happens who will pay the out of pocket expenses associated with your passing?

A Final Expense policy not only addresses this issue by being paid out immediately at the time of your passing, but as previously stated can also help maximize the finances you did put aside. What if, instead of putting $10,000 aside for your funeral, you took out a $10,000 policy at $40/month and passed away 5 years later? You would have spent $2,400 of the $10,000 set aside and now your heirs receive a $10,000 death benefit and there’s still $7.600 sitting aside in a separate account.

Lastly, a common joke I hear when talking with clients regarding Final Expense insurance is, “They can bury me in the backyard.” Much like weddings, people tend to overspend at funerals.  Our loved ones want the ceremony to reflect their feelings they have and provide a service to honor your life. While you may have a minimalist approach to your burial, chances are your loved ones will want to make a gesture commensurate to love they have for you.

These are all items to take into account when deciding if you need a Final Expense insurance plan and there are many companies out there who offer these types of plans. Please don’t be fooled by commercials you see on TV that advertise for plans that offer guaranteed acceptance. Despite sounding like an incentive to you as the consumer, that isn’t necessarily the case.

When purchasing any type of insurance plan, you want to be asked health questions because if you pass you will qualify for lower premiums. These are all items our team of Licensed Insurance Brokers at BGA Insurance Group can help go over with you. Call to book a free review and we will go over all of your options and find a plan that fits your needs and your budget.

Book your appointment:

The article What Is Final Expense Insurance? originally appeared on BGA Insurance Group