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Budgeting Long Term Care
Health Insurance

Budgeting Long Term Care

by Kimberly Johnson
written by Kimberly Johnson

Budgeting Long Term Care

Budgeting Long Term CareLong-term care costs are an x-factor many people simply do not think about when budgeting their retirement. The odds you’ll need some form of long-term care, however, are surprisingly high. According to longtermcare.gov, 70% of people turning 65 should expect to use some type of long-term care in their golden years. Budgeting Long Term Care
As calculated by Genworth financial, a semi-private room in a nursing home for 2015 cost an average of $80,300. When it comes to finances, seniors are generally on a fixed income, so how can a senior account for such an exorbitant cost? Well, if you plan ahead, there are a few options worth considering.

Medicaid:

While Medicaid is a great option, it’s not applicable to everyone. They have very strict financial and medical rules. Each state has individual guidelines, so check out this guide for your state’s limits and restrictions. Generally, Medicaid allows $2,199 a month in income and $2,000 in assets. The medical portion is determined by whether or not an individual needs care at the nursing home level. If you do qualify, you will not have out-of-pocket costs, but you must choose a care home that has an agreement with the state.

Qualified Income Trust:

If you do not qualify for Medicaid because your income is too high, you can open what is called a qualified income trust, income only trust, or Miller trust. Some states allow you to simply spend the extra money down towards medical care, while others make you create the Miller Trust. It depends whether your state is an income cap state or a medically needy state. Qualified income trusts allow a person to qualify for Medicaid even if their income is beyond the limit, usually around $2,000 per month. For example, if you make $2,600 a month and your state’s limit is $2,000, all money under $2,000 will go towards care, the state will keep the excess, and you will still qualify to receive Medicaid benefits.
Essentially, the creation of a qualified income trust is the state’s way of getting paid back for care and living expenses. The problem with medical spend-down or a qualified income trust is that, for the most part, all income goes towards care, leaving little behind for loved ones. If you’re not concerned with leaving a legacy, this is a great option because the cost of care will be taken care of; placing no financial burden on loved ones.

Reverse Mortgage:

Within the last few years, reverse mortgages have slowly gained in popularity. While not complex, this type of loan doesn’t work for everyone. A reverse mortgage is a loan borrowed against a house’s equity. Rather than making monthly payments, as you would with a normal mortgage, the bank reversely pays the homeowner each month. Essentially, the bank is slowly buying the house. If the borrower moves into a care home or dies, then the bank takes ownership of the home. If a homeowner is pretty healthy and wants some more money for retirement or in-home care, then this could be a decent option. If you are trying to leave your house behind for loved ones then this choice will not work. See a detailed list of pros and cons here.

Long-term Care Insurance:

If you are young and thinking ahead, one way to afford long-term care is to purchase a long-term care insurance plan while you are still healthy. A healthy 55 year old can find an affordable policy that provides adequate coverage. Once a life change occurs, such as a stroke or a fall, it becomes nearly impossible to qualify for long-term care insurance. Long-term care insurance pays for long-term care in the event that the policyholder needs it.
As mentioned above, Medicaid long-term care has a very strict qualification process, but many states offer what is called a long-term care insurance partnership. For example, if the policy covers $350,000 worth of care and that money is spent through, the policyholder can now apply for Medicaid with $350,000 worth of assets exempted during the qualification process. This is perfect for people who want to leave a legacy behind, but also need to qualify for Medicaid.
 
Max Gottlieb is the content manager of Senior Planning and ALTCS in Phoenix, Arizona. While not affiliated with any long-term care insurance provider or Reverse Mortgage brokers, Senior Planning receives many questions on these subjects. Senior Planning and ALTCS give free assistance to seniors and their families, helping them navigate the often-complicated process of finding benefits or care.
 
 

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Understanding Medicare through Supplemental Insurance
Medicare Plans

Fewer Doctors Taking Medicare Patients

by Jeff Dailey
written by Jeff Dailey

Fewer Doctors Taking Medicare Patients

 

Fewer Doctors Taking Medicare patientsIn a recent discussion with one of my doctors, he and I spent a few minutes discussing the ongoing changes and challenges facing physicians who practice medicine today, and more importantly the impact on new doctors just starting to practice. Fewer Doctors Taking Medicare patients

Many of today’s doctors leave medical school with a great deal of debt accrued during the pursuit of a medical degree, and few new graduates can afford to go into a sole private practice. A majority of recent graduates join a group or a hospital to avoid the costs of office rent, equipment purchases, liability insurance, staff costs and the monthly expenses involved in opening a new business.

Medicine used to be a patient-centered and was often a very lucrative career. But with hundreds of government regulations, and new reporting requirements increasing virtually geometrically in the past decade plus the impact of reduced reimbursements from private insurance and Medicare, it’s a whole new world of medicine.

Here’s one of the unintended consequences that has made the practice of medicine not only less enjoyable for many doctors, but will affect a number of boomers. While it might not impact everyone now turning 65 and becoming eligible for Medicare, it will add some challenges to doing so for some.

If you don’t already have a primary physician or might require a specialist, you may be surprised to learn when seeking a doctor, that a growing number won’t expand the current size of their current practice with new Medicare patients. So while you may soon be eligible for Medicare, you might struggle to find a doctor who will accept new Medicare patients.

The Kaiser Family Foundation conducted a research survey and found that 21 percent, or about one in five, physicians are not accepting new Medicare patients and 14 percent are not willing to take privately insured patients. Some physicians may or may not accept traditional Medicare patients that provide payments to those doctors based upon a fee schedule dictated by the government. Other physicians may not be willing to accept Medicare Advantage plans where paid fees are negotiated with private insurers, plans like the AARP United HealthCare, Humana and Blue Cross/Shield “Advantage” plans.

What this means to those of us that live in western North Carolina is that it might be a very good idea to make sure that your current physician, if you have one, will continue to see you when you become a Medicare patient and will accept the Medicare plan you choose. Not all doctors will accept all plans, especially certain Medicare Advantage plans.

If you’re going to become eligible for Medicare in the coming months, get in front of this potential problem. By doing that you’ll know that the doctor you have or choose will accept the plan you wish to select or help guide you in the selection of a plan that includes him or her.

Ron Kauffman is a consultant and expert speaker on issues of aging, Medicare and Obamacare. Ron is the author of Caring for a Loved One with Alzheimer’s Disease, available as a Kindle book on Amazon.com. His podcasts can be heard weekly at www.seniorlifestyles.net.

 

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Prescription Programs

More Americans Choosing Generic Drugs

by Jeff Dailey
written by Jeff Dailey

shutterstock_167991929 (2)More Americans Choosing Generic Drugs
Have you ever gone to fill a prescription and the pharmacist asks if you’d like the generic version of the medication, perhaps reminding you that it is at a considerable cost savings over the brand-named drug? Or you’re told that your insurance will only cover the generic equivalent of what your doctor has prescribed?More Americans Choosing Generic Drugs
The first time this happens, you undoubtedly have many questions: Is there a difference between branded and generic medicines? Will the generic be just as safe and effective? Do insurance companies prefer generics? If you have, you’re not alone in asking these questions.
-It’s no secret that the rising costs of health care services and medications have been affecting millions of Americans – indeed, our economy – and will undoubtedly continue to do so in the future. However, generic alternatives have proven to be a critical factor in slowing down national health care spending. In fact, generic drug use has saved America’s health care system approximately $1.07 trillion over the past decade, with $192.8 billion in savings achieved in 2011 alone, according to a 2012 study by the IMS Institute for Healthcare Informatics.
However, while consumers recognize the cost advantage of generic drugs, they are reminded, from time to time, of the question of quality and efficacy of generic medications versus name-brand equivalents. Consumers should know that the U.S. Food and Drug Administration, the federal agency responsible for protecting and promoting public health, requires that generic drugs must be identical or “bioequivalent” to brand name drugs in dosage form, safety, strength, route of administration, quality, performance characteristics and intended use.
“The U.S. FDA tests generic medicines just as rigorously as their branded counterparts,” explains Venkat Krishnan, senior vice president and regional director at Ranbaxy Inc. “Generic drugs must meet rigid qualifying criteria before they can be made available to the general public. At Ranbaxy, we have stringent protocols in place to ensure that our products are both safe and effective, and we stand behind that, focused on our philosophy of ‘Quality and Patients First.'”
People are choosing generics in increasing numbers, out of economic necessity and because they are increasingly better informed.Of the 4 billion prescriptions written in 2011, nearly 80 percent were dispensed using generic versions of their brand name counterpart. With generics, consumers have the option of paying a price that is as much as 85 percent lower than name-brand drugs.

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Health Insurance

5 Things to Consider When Comparing Health Insurance Plans

by Kimberly Johnson
written by Kimberly Johnson

shutterstock_157876310Whether you’re in good health naturally or you rely on medication and specialists to stay that way, finding the right health insurance plan is key—and you could pay a penalty if you don’t have it. 5 Things to Consider When Comparing Health Insurance Plans
If you’re self-employed, your employer doesn’t offer health insurance, or even if you simply think you might be better off on a different plan than what your employer offers, you may find yourself buying individual health insurance. While shopping for your own health insurance may seem daunting, breaking down the plans can help you make a more informed decision.
“People need to be careful when comparing plans,” says Joel Cantor, director of the Center for State Health Policy at Rutgers University. “People tend to make the mistake of looking at the premium only and not cost-sharing. It’s a little more of a complicated calculation.”
Some individual plans may leave more money in your pocket than others, even though at first blush they may not look that way.
For example, if your employer does not offer health care coverage, you may qualify for tax credits and other subsidies in an individual plan, making your costs lower. Though less likely, you may be at an age and state of health where you can buy an individual plan that is less expensive than the one your employer offers.
If you are employed you are likely paying only 15 to 20 percent of the premium, says Paul Fronstin, director, health research and education program at Employee Benefit Research Institute in Washington, D.C.
“Premiums in the non-group [individual] market are age rated, and the younger you are, the lower the cost. But it still might be more than your work,” Fronstin says.
For those with health concerns, some individual plans may also offer more value than others, or even more than an employer-offered plan. These may allow you to find the right network, specialists, and prescription coverage for your needs.
Bear in mind, however, that you have to be on your toes when it comes to finding a healthcare plan that will really offer valuable savings, because plans and their costs change frequently.
The Kaiser Family Foundation, a health policy nonprofit, released an analysis in June 2015, projecting changes to premiums in the individual marketplace in 2016. The report found the most popular individual plans are increasing on average 4.4 percent from 2015 to 2016, which they said is moderate but a bigger jump in price from the previous year. The report stresses the value in shopping at each open enrollment period, as premiums fluctuate.
Open enrollment for 2016 begins Nov. 1, 2015 and extends to Jan. 31, 2016. It’s always worth considering all options, especially where your health and budget are concerned. Here are some things to consider when evaluating the pros and cons.

  1. Your medical needs: Make a list of any doctors, specialists, prescriptions, or other services you require to maintain your health or to prevent health issues.
  2. Your budget: Figure out how your budget will allow you to spend on health insurance and health care each month.
  3. Premiums + network + cost sharing: Check the premiums, network, and cost-sharing specifics of each plan. Cost sharing includes deductibles, co-pays, and coinsurance. Compare not only the premiums, but also whether all your anticipated medical costs are covered in-network or if you will have to pay for out-of-network to see your preferred doctors. Evaluate all of these costs to determine if there is a better savings (monetary) or value (more affordable access to your required specialists and prescriptions) in one plan vs. the other.
  4. State vs. federal coverage: Keep in mind that in most states, individual coverage is federally managed, while in a handful of others, it’s managed at the state level or some kind of hybrid between the two. If applicable, evaluate any benefits in your state’s coverage. For example, some coverage that may vary includes birth control, breastfeeding, dental and vision.
  5. Tax credits and other savings qualifications: Determine whether you qualify for tax credits and other savings offered in the state marketplace. This will be an important factor in determining whether an individual plan makes more sense for you, cost-wise. According to Healthcare.gov, your employer can tell you if its plan meets the standards of the Affordable Care Act, thereby disqualifying you from any savings on the individual plan.

Beth Shea Palmer is a reporter and editor based in Chicago.
Written by Equifax Reporter on September 17, 2015 in Insurance

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